Analyst questions T-Mobile, EMI model

Following Monday’s announcement that Deutsche Telecom’s mobile arm, T-Mobile has partnered with EMI to trial an advertising supported mobile video service, at least one analyst believes the model could fall short.

The trials will give selected customers access to free video content embedded with television-style advertising. However, Windsor Holden, senior analyst at Analysis, wonders whether the revenues generated will be sufficient to make the services financially viable for network operators

The theory goes that advertising will support the cost of the media and create new revenue streams for operators.

Holden told in an email that “while a number of major advertisers have signed up, what have they paid? Given that the service is in its infancy, and will at the outset have a comparatively small number of users (ie a small number of T-Mobile’s existing 3G user base), my guess is that advertisers will not have invested a substantial amount at this stage”.

Holden believes that splitting a negligible amount of advertising revenues between both content provider/rights holder and operator is “not quite half of nothing apiece, but not far from it”.

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